tv Your Money CNN August 25, 2013 3:00pm-4:00pm EDT
court. alina cho, cnn, new york. >> great inspirations. that's going to do it for me in the "newsroom." i'll see you again an hour from now. but first, here's a question. so what does 29-year-old mark zuckerberg have planned for his 30s? how is that connecting the entire planet? >> they're going to use it to we the side what kind of government they want. getting a cess to health care for the first time ever, connect with family hundreds of miles away that they haven't seen in decades. >> find out what else. "your money" starts right now. nasdaq shutting down. microsoft steve balmer stepping down. technology rules the world and all this while facebook's mark zuckerberg says he wants to wire the world. i'm christine romans. this is "your money." nasdaq's nightmare put your retirement at riff. it shows once again that the computers run the stock market
and humans don't yet know how to manage the risks created by the rise of the machines. so what happens if we wire the world? that's just one of the reasons i headed over to the "new day" set to speak with my colleague in the morning chris cuomo about what he learned from mark zuckerberg this week. you asked him about his new plan to connect the world. he's changed the world once. he wants to do it again. >> it's obvious to look at this about growing market, right, and the mobile space. mark zuckerberg says this is not about making money for them, it is literally about changing the world. >> here, we use things like facebook to share news and catch up with our friends, but there, they're going to use it to decide what kind of government they want, getting a cess to health care for the first time ever, connect with family hundreds of miamis away that they haven't seen in decades. getting access to the internet is a really big deal. >> what about how? how do you do this? how developed is the plan?
>> we have a plan, a rough plan, for what we think we're going to need to do to pull it off. and of course the plan will evolve over time and we'll get better ideas. but, you know, if you look at the trends, you know, data is becoming more available to people. getting more efficient to run. there are new business models to help more people get online. >> it's good for facebook and the other companies because mobile access to the internet is where your business lies, right? >> if we were just focussed on making money, the first billion people that we con net ved way more money than the rest of the next 6 billion combined. it's not fair but it's the way that it is. and we just believe that everyone deserves to be connected and on the internet. so we are putting a lot of energy towards this. >> so there you have it. to mark zuckerberg, 5 billion people sounds huge, especially compared to 1 billion for them. but he believes it's a tool that everyone should have. what we do with it, what company they use is up to them.
>> can he really do it? some companies are trying to do it. google has these balloon, right, with radio antennas to bring connectivity after a natural disaster. tech companies are scrambling to develop a smartphone that costs less than $15. a lot of companies are racing out there trying to change and trying to bring this about. how is -- can he do it? how mature is this idea? >> well, i think that judging by what he said it's in its stages. you have possibility and feasibility. i think what takes him one to the next is how much skin there is in the game and playing that against the inevitability of this change. the market must grow. people must get more involved with access to the internet. time frame, the period involved, i think, is a much more cloudy conclusion. you have to think 5, 10, 15 years but from the perspective of facebook, that's where your mission takes you anyway. >> he has so many social goals in his mission but his social goals at some point can become
financial goals. more people connected, the more are on facebook, the more people you can advertise to. it's interesting to sooem sometimes his social mission could be off from a financial goal but they will merge. >> some great mind said that altruism is often motivated self interest, right? it doesn't make it wrong, right? is fact that he's going to find a way to grow his market and expand reach to people who dead is a good thing. and i think that what we're also seeing in mark zuckerberg is personal maturity. not even 30 years old yet but he's taking on the significance of facebook is. . the issue of immigration. he's starting to wade into deeper waters that go beyond his own business model. >> legacy step and he's not even 30. >> he's already done the movie of his life. >> chris has had a busy week. thank you for joining us. he also sat down with the president to cut college costs. we're going to show you chris' conversation with the president later. really important step for anyone
borrowing money for college or anyone who cares about the future of this country and our workfor workforce. coming up, the boyce club has some serious competition in shaping the future. meet marissa mayer, she's spending billions to save yahoo!. investors seem to love her. fashion magazines are taking notice, too. is it worth your money to buy her company's stock? we play buy or sell, next. ght n is being streamed. a quarter million tweeters are tweeting. and 900 million dollars are changing hands online. that's why hp built a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this&is gonna be big. hp moonshot. it's time to build a better enterprise. together.
stock ownership in this country is is at a record low. many people think the market is is a leg electronic casino and wall street always wins anyway. on thursday the nasdaq basically shut down for three hours. the company called it a connectivity issue. when the president of the united states has to be briefed on a situation, you know it's a huge deal. and it did not help investor confidence at all. matt mccall is the president of the financial group. nasdaq nightmare put everyone's retirement at risk. how big a deal is it when a
major american exchange goes down for three hours? >> it's a huge deal. there is no update during the three hours p traders are freaking out. more importantly, the individual investor at home turned on the news at night and they saw the headline the nasdaq shut down. there's already this lack of n confidence in the financial markets of the individual investor. this just adds to it. now people sitting a home, i don't know if i can trade my stocks during the day, i don't trust anybody, i don't trust wall street already, now this happens. do i get out of the market completely because i don't trust the testimony system. this is a much bigger situation people think. >> is it the rise of the machines, electronic trading, whether it's high speed traders or high-tech exchanges. humans just can't monitor the risk? >> still humans on the floor of the new york stock exchange or the floor in chicago. this is when humans come back. if humans were there they could sit there and take the trade and make the mark. it could be good longer term because people realize we still need humans on the floor of the
exchange. >> i want to -- volity aside i want to talk about the tech sector and how hot it is. nasdaq up 20% this year. more than the dow or the s&p 500. they're the big old companies that make the hardware like dell, intel, and microsoft. those stocks have done well in 2013 but the companies are still struggling to catch up to the cool kids, facebook, google, apple. not all the cool kids make stuff that comes in a box but think outside of it. that you're one of the tech investors. we like to play this game called "buy or sell." apple, budget version may be on the way and a gold phone. performance year to date. look at that. buy or sell apple shares? >> this is definite abuy down here based on two things. one, based on the chart. formed a big bottom in april and june, what they call double bottom. even more importantly, longer term, if you look at the fundamentals of apple, take the "p" ratio overgrowth. it's below one.
.7. it's a screaming buy to me. you know, i'm on the side of tim cook. carl icahn is now dabbling in this stock. i think at 5.25. >> 700 group put this one a big buy. >> big buy for me. >> let's look at this one, the next one, facebook. when it went public you weren't interested at all. you changed your nip r mind and have sense bought the stock. the stock had a great move. even crossed $40. are you still buying? >> i will tell you this. i sold some right about there because when it popped, i it took a profit. i still believe that there is more upside on this so i kept some of my facebook. if you're a new investor, maybe buy in the high 30s but this -- mobile revenue went from zilch to 41% of revenue. their mobile users jumped 51% last quarter. everybody is using a iphone, tablet. they're going to take advantage of it this. >> cisco, 4,000 job cuts but the
stock is up big this year. >> i'm selling cisco. you can see on the chart it's dropping off. this is looking to grow about 4% earnings next year. but it's still trading like it's a big tech stock. going the wrong direction for me. >> so you're out of cisco. yahoo! beat google in traffic. that was the first time in two years. ceo marissa meyer, tumblr. is yahoo! a company again? >> pretty good. she's a buy, so is yahoo!. they're both buys for me. >> already sold. >> i'm buying yahoo!. i think the name yahoo! still -- resonates big in the tech world and search world. she's doing a great job. great buy around $27. >> buy around $27. finally, google. >> google is everything that you want it to be. driverless cars, you name it. i want to buy google here ten years ago. look at the pullback.
this is 860. long term, it's a pe ratio of 17. this is a growth story. i'm buying going m. >> let's recap here. >> you say buy apple, facebook, yahoo! google. cisco is your only sell here. you have two other bonus stocks you like. tech companies but they have a retail presence. >> netflix is one of them, the cable box is done. we're done with cable box. big thing in new york. time warner, cbs, i can't watch my shows so it's driving me nut if i have netflix i can do that. netflix is for the future. amazon, i looked this morning. i can buy organic baby food or parts for my atv. this company sells everything and anything. they have a cloud services they're offering right now. i think amazon is great buy, too, long term. >> who do all of these companies have in common? they are becoming increasingly controversial. what that is and what the companies should do about it, and considered other things...
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2013 nfl season less than two weeks away. imagine if you could just logon to google to see your favorite teams. here's the score. tech blog all things d reports nfl officials including commissioner roger good el met with officials this week and nfl sunday ticket package. part of the discussion, they have rights to publish every game. google offers no comment on the report. and nfl says it often meets with innovated leaders in silicon valley. the nfl sunday ticket rights costs directv $1 billion a year. subscribers pay $200 to $300 each season to watch. tickets for nexter? 's world cup went on sell this week. fifa put a lottery system in place letting fans piccolo indication, team, or round. offer buyers an eight-page instruction manual on how to
order them. some fans were still confused but that did not stop more than 1 million applying for tickets in just seven hours. and finally, forget a few pairs of shoes, a free car, or an unlimited supply of sports drinks. this corporate sponsor got him a helicopter to jump out of. it's the fifth stop on the red bull cliff diving series. right here in new york city in front of statue of liberty. backboard dive from 75 feet above the water straight into the hudson river. all right. a much bigger event for corporate sponsors is just a few months away at the olympics. it's a time of celebration and competition and controversy. the nazi regime was in power the u.s. considered boycotting. jesse owens wins four gold medals. 1968, mexico city, tommy smith and john carlos give the black power salute on the podium during the national anthem. they were expelled from the games. 1972 munich massacre israelis
kidnapped by palestinian terrorist, 11 athletes, coaches and judges were murdered. 1980 in moss course president jimmy carter calls for a boycott after the over yet union invades afghanistan. they respond by boycotting in 1984 games in los angeles. next winter's olympic games in sochi, russia. last month russian president slad min putin signed a law that bars the public discussion of gay rights and relationships anywhere children might hear. it's been condemned by russian and international rights groups as highly discriminatory. what politicians decide to do about it but putting corporate america in a tough spot. an article in the new yorker this week titled "why the olympic sponsors should take action on gay rights." richard is a political strategist and gay rights advocate. bob zito is with us and he helped shape the brands of sony, new york stock exchange,
bristol-myers squib. you write the participation of corporate sponsors mostly benefits the russian government. it's not required for american athletes to succeed. they sign deals before president putin signed that law. what do you think these corporate sponsors need to do now? >> i think the point is, right, that no one wants to penalize the athletes who worked so hard to succeed and most people believe we should participant. the corporate sponsors because they donate sod much money to the games, that they have earned the right to insist that russia comply with the policies that these corporations, most of these corporations have for their own employees of non-discrimination. i think that they have a lot of -- they have the power of persuasion. they also have the power of threatening to withdraw their sponsorship if russia doesn't change. >> so many of these companies, bob, they've had for years policies that have been very open and even, you know, moving faster than the government has
on rights for couples in their companies, for their employees. would it be hypocritical for them to continue sponsoring the olympics in a country that is going in a different direction? >> no, i don't think it would, christine. because the lks are a big part of the brands of the companies that we're talking about. they've all done the right thing inside the own companies with their employees. what their kus customers, with their constituents. for them to pull out right now would have an impact on their brand. what they can do though as richard said is to make some statements, some comments about what they believe in and show the world. >> the power of the press release, not necessarily the power of the dollar. u.s. athletes are speaking out. listen to figure skater johnny weir. >> i think and believe really that our presence in russia will do nothing but help fight this law and help the lgbt community. >> people taking to the streets to pour out a russian liquor and celebrities are getting involved.
bravo's andy cohen declined to hold the miss universe pageant in russia. he came out to the public this week and declined an invitation to the st. petersburg film festival. so, bob, does an issue like this threaten the brands at the olympics at all? i mean, what are those executives talking about behind closed doors? >> tear talking about what they're going to do with their employees to reassure their employees that their policies that i put in place and earned their trust over years are still their policies. they're going to separate sponsorship of the olympics from any discussion of their internal policies which they can do. remember, the olympics is a part of each of these companies brand and if they step away from it, if they give up that podium their biggest competitors will take the podium. >> it's interesting that they've been so out for gay rights in this country and then they find themselves supporting the olympics at the same time. president obama doesn't think that boycotting the games is a good idea. he put a positive spin on the controver
controversy. >> one of the things i'm really looking forward to is maybe gay and lesbian athletes bringing home the gold or silver or bronze, which i think would go a long way in rejecting the kind of attitudes that were -- we're seeing there. >> what do you think? >> if they don't get out in front of this, if they don't put out the statements that bob referred to, if they don't -- should they pull their money? >> i think they should threat on the pull their money. ultimately it's going to be -- you're going to have to see. if there are mass i've demonstrations, if people are being arrested, if potentially athletes are being arrested, being associated with the olympics is not going to look like such a good deal. i mean, this law outlaws any kind of speech. so even if you wear a rainbow pin or if you hold hands with another athlete, are you going to be arrested in russia? that is is not the kind of thing corporate sponsors want to be associated with. if you're running a corporate
sponsorship, you have to get out in front of it. >> we will continue to see how it unfolds. thank you so much. up next, 8.2 million americans who want to work full time punching the clock part time instead. can america lead the world if can america lead the world if we're a nation of part timers? n grrrr ahhh let's leave the deals to hotels.com. oh my gosh this is so cool... awesome! perfect! save up to 30% plus an extra 12% off with coupon... now until labor day. only at hotels.com loses his computer, exposing thousands of patient records to identity theft. data breaches can happen that easily. we don't believe you should be a victim of someone else's mistake. we're lifelock. we constantly monitor the web so if any of your personal information is misused, we're on it. ♪ ow. [ male announcer ] call 1-800-lifelock or go to lifelock.com today.
part-time job, a full-time worry for millions of american families. i'm christine romans. this is "your money." only in america can you grow talent like there. we'd like to think of america as innovation nation, but the numbers reveal a slogan that should read "part-time america." call it the do you want fries with that economy. part-time jobs have exploded. nearly doubling since 2007. 8.2 million americans who would rather have a full-time job punching the clock part time inste instead. >> we're not there yet. >> president obama admits
there's more work to do but is his signature achievement obama care partly to blame? more companies have said because of this law they'll have to shift full-time workers to part-time. >> forever 21 now the latest company demoting some full-time workers to part time, not because of obamacare that chain said, it's just the business. but even unions are worried. the teamsters and two others sending a letter to democratic leaders saying the affordable care act would, quote, destroy the foundation of the 40-hour workweek that is the backbone of the american middle class. a middle class in trouble with 600,000 more americans forced to take part-time gigs since march. whatever the reason, the numbers don't lie. is america becoming a nation of part timers? >> all right. those are the numbers but let's get personal. dolly martinez works two part-time jobs. she hasn't been able to find a full-time position since she graduated from college in 2009.
>> i usually wake up between 6:30 and 7:30 and then, of course, i would head over to the coffee shop first. that's usually 8:00 to 2:00 shift. and then, of course, i would have like a ten-minute break, which isn't enough. and then, of course, i'll have an hour break from 2:00 to 3:00 going to my next job and i'll work from 3:00 to 9:00 but that job will give me a 30-minute break. after that i get off around 9:00 and then head home. >> dolly says she brings home about $1500 a month. steven moore is an editorial writer for the "wall street journal." dan, many americans are just like dolly, asking, where is my recovery? median household income has fallen 4 1/2% to $52,000 in the four years since the recovery began. since the recovery began. can america lead if the kinds of jobs we're growing are dolly jobs? >> the short answer is no.
we have a jobs crisis and we also have a wage crisis. in other words, we're adding jobs that will 7 million more private sector jobs than three years ago but they're not paying more and they're not paying more because companies don't feel they have to there is a lot of slack in the labor market. they're able to move people around. this is the reason why they're not making people full time. they don't feel the pressure to treat employees, especially in these service industries like retail, to give them the terms that they want. these people would prefer to have full-time jobs. >> bartender economy, for sure. dolly told us she hohas $15,000 student loans. >> we can't price the middle class and everybody working to get into the middle class out of a college education. we're going have to do things differently. >> you don't often agree with this president. sometimes you do. mostly you don't. do you agree with him on college affordability? >> i'm not sure -- i certainly agree that college costs way, way, too much, christine. i have two kids in college so it
is killing me financially. i think the solutions is not to keep tloeg more and more federal dollars at the universities. i think the universities is the biggest scam going in america. there's no reason a college education should cost 30, 40, $50,000 a year. i think there's good news. i think you're going to see more and more people moving towards online education, cutting these costs of colleges because, look, it circles back to what you were talking about. if people's salaries and wages are falling, how in the world can they send -- afford to send kids to school when it's taking up more than half of their income? >> you know, the one thing is you -- $26,000 in student debt, you can afford to pay that back if there's a job on the other end. if we are part-time america, that investment we are encouraging kids to take doesn't make any sense. >> do you know what is the saddest part of the story you were talking about about the part-time nation and no question the statistics document that. what's really discouraging is when you talk to the burger flippers and the people behind
the counter at mcdonald's or forever 21, it's amazing how much of them do do have a college degree. that's the tragedy here. even people graduating from college can't find that job that's going to lift them up into the middle class. >> we know the average age of a fast food worker is 29. people with college debt, want to move forward and stuck in these jobs. i want to bring in advertising legend out with this video urging all of us to buy american. >> if each of us spends just 5% more on things made in america, economists say we will create a minimum of a million new jobs for americans. >> is that what we need to do? is america's desire to chase cheap one of the reasons why we're not selling things? >> this trend is happening. if you look at our trade deficit, it's down 15%, 20% over the last couple of years. a lot of it has to do with the fact that we produce a lot of
energy, oil, natural gas, our own electricity, we're using a lot less i'm pofrted fossil fuels and, guess what, north dakota, which the an energy state, has an unemployment rate of 3%. we aren't eating a lot more of what we grow. the food that we eat, overwhelmingly comes from here. energy increasingly comes from here. then you're seeing at the margins, walmart and ge talking about how walmart was buying more light bulbs and ge was making them at home. at the margins the jobs were coming back. yes, if we made a conscious effort to consume more american stuff, put more americans to work. >> how do we create jobs that are not part-time jobs right now or is part-time america the new normal? >> i love the idea of buy america. i'm a free trader, as you know, but i also believe that people should buy goods produced here in the good old united states of america. i hated to see business americans offshore their american business toes china or japan or germany or mexico. we do need to get competitive in
washington. i mean, we have to take competitiveness seriously. how do we make american companies the most efficient in the world? how do we give them an edge? i think when you talk about the big tax increase this year, when you talk about, you know, cap and trade legislation, when you talk about things like, you know, raising the minimum wage. i think those are things that make america less competitive and, therefore, make it very difficult for american companies to compete. >> you certainly would like to see american ceos let hold of the purse strings, get some c confidence and start growing stuff here again. record amounts of cash. what is it going to take to unbottle that. we'll talk about it next time. dan, stephen, thanks. up knicnext, more about mak college more affordable. president obama wants students to get a better return. we're going to take a closer look at why costs are climbing and whether this president's plan can stop that relentless rise.
college is the gateway to the middle class but that gateway is becoming much narrower. we already know that college graduates have higher wages, there is higher employment, but students are leaving class with this. two-thirds are leaving college with debt, an average amount of $26,000, and all that debt adds up. >> our economy can't afford the trillion dollars in outstanding student loan debt, much of which may not get repaid because students don't have the capacity to pay it. >> so why are american students being driven into debt? rising prices. over the past ten years the cost of attending a four-year public college is up a
whopping 104%. that's in response to cuts from the state and local government. it's putting more of the burden on students. the sticker price for a four-year private college, up a more modest 60%. it's true, colleges are offering more financial aid to offset rising tuition. more than 20% of students get some financial aid from their school, an average of $6400 per student. that's on top of student loans and federal grants. but that aid is putting a strain on school budgets, forcing tuition prices higher. the average sticker price today for four years of tuition at a public college, $38,000. that's a bargain compared to 127,000 for a private college. but for a child born today, it could be three times that. $108,000 for public school, more than $360,000 for private college. for a child born today, three times that. $108,000 for a public school. more than $360,000 for a private college. unbelievable.
so as states, families ask colleges struggle to pay the bills, president obama wants the federal government to help. after speaking to students at the university of buffalo, president obama sat down with our very own chris cuomo and outlined his college plan. >> we want to create a new system of ratings for college so that parents and students know what schools graduate kids on time, are a good value for the money, lead to good jobs, right right now the commercial rating systems tend to just focus on what's the most selective school or the most expensive school or has the nicest sports facilities. >> return on investment. nick newman is a columnist for yahoo! finance. rick, could this rating system work, help students and their families make better choices about how much money they're borrowing for which school and what they're going to get out of it? >> i think it could. i think what is encouraging is we hear all of these plans out of washington. almost all of them go nowhere because it requires democrats in congress to agree and actually pass something.
this does not require any congressional action at all. this would be the department of education, which is already collecting this kind of data from colleges, basically putting this into a format that allows you to compare schools. what it will do is make consumers better shoppers for college. so you will have more tools that will help you figure out, where do you get the best return on your investment? you said that before, i think that's exactly the way people need to be thinking about college education. it's an investment. would you invest your retirement savings in something if you had no idea what the return was? you wouldn't. they've got rock climbing walls in the gym and amazing facilities. go to any college campus today. you see backhoes, building. is that part of the program? >> i think that's part of the problem. what's really going on in higher education is it's a seller's market. we've got more demand for college. that's going to continue. >> you have a choice. if you don't have that degree, you don't -- >> everybody knows you have to go to college to get ahead. utsz not as if new colleges are
opening up around america like a new airline might start up. we have a fixed amount of supply and when demand is going up and supply isn't, prices rise. >> there's a lot of cheap money that you can borrow. 17, 18, 19, 20-year-old kid can borrow 10, 20, 40, 50, 60, $70,000 to go to school. there's an endless supply of money for chasing after this really important investment. >> right. and that puts no pressure on universities to find ways to be more efficient, cut costs, and so forth. so what might happen, if people find the information on the government website it's not going to directly force colleges to lower tuition. what it will do is macon sumers better shoppers for college. so if you will have more tools to help you figure out where do you get the best return on your investment. you said that before. that's the way people need to be thinking about college education, it's an investment. would you invest your retirement savings in something if you have no idea what the return was?
>> i think a lot of families don't think of it early enough it's four years. we showed you the numbers. four years in a row you're buying a new car. you would save like hell to buy, if you had to buy a new car four years in a row. a lot of kids are buying mercedes when they can only afford to get a used car. that's the college choice. >> people think if i go to more of a name brand school, that might costs two or three times as much as state school that might benefit me in the job market in the future. does it really? we actually don't know whether going to a name brand school that sounds good actually helps you get a job and earn more money. this kind of information will help people -- it's not going to give you every answer you want but it's going to help you think more clearly, more thoughtfully about how to spend this huge bucket of money. >> i think you have to go to college with 18 credits under your belt. when you enter college you're not going to spend $15,000 getting caught up on math and reading. people are graduating -- 25% of kids are ready in all subjects
when they go to college. it means you're spending borrowed money to do what we should have done in high school. i just feel like there's this mediocrity that's accepted. look, all of us have been there, right? take three years to figure out what your major is or whatever. it's just not going to fly, it just isn't. >> all this attention that the rising cost of college has produced is there are new ways to get through college without so much debt, perhaps without any debt. some schools are starting to offer three-year degrees, for instance. >> i love those. >> so you go to school in the summer. if you think about it, why do college students take off the summer, anyway, to relax at the beach or get a job as a lifeguard? is that necessary? no, it's not, really. there are ways to use new on-line tools to take some of your courses that way. another thing people can do, go to community colleges to get those basic credits, make sure they can transfer into another school and then do your last two years and get that degree from the name brand school. there are a lot of strategies for -- >> or you can take those community college credits while you're still in high school in order to get you ready. be careful about the college credits, they do transfer where you want to go because sometimes
kids get stuck on that. there are a lot of options, but it means being 17 years old and being strategic and a little financial manager and we know they're not. >> teenagers are not financially literate people, so what does that mean? somebody else has to get involved, which means parents. parents need to apply all the financial smarts they have. this is -- everyone talks about your house is your biggest investment and your car is being the next. i'm not sure that's true. >> people who are crying about $26,000 on average student debt, you can pay that back. it's these kids who have 60, 70, 80 that i worry about so much. chris, nice to see you again. last year americans spent $15 billion on video games. americans. $15 billion. video games. halfway around the world, koreans spent 17 billion on private tutors for their kids. what we need to change to keep our place in the global economy. that's after the break. hey love.
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the smartest kids in the world are not here in america. the u.s. spends more on education than almost every other developed country. what do we get for our money? u.s. high school students rank 31st in math and 23rd in science versus other developed countries. this is according to the highly regarded pisa rankings. our education system has barely made any progress in the last half century. education levels can drastically change for better or worse, nations like finland, south korea, and canada have made huge gains in international test scores where norway has recently fallen. amanda ripley is the author of the incredible book, "the smartest kids in the world and how they got that way." she's also a time contributor. this book is for everyone in the education debate in the world, especially this country. you visited the world. you looked at top-performing countries. you collected data on all this, which is so important, because so much what happens in
education are opinions and feelings and not data. you also enlisted the help of some field agents. you got people studying abroad and they noticed a certain attitude in those schools. listen. >> on the first day of school everyone was wearing black suits, black ties and there was an assembly and it was very formal. you could tell that people took their education a lot more seriously here. >> the students here care more, they understand that it's important. they see the reaction, what they do now will affect them. it's more real to them. >> we're number 31 in math, 23rd in science. we only get 2,300 days in school to prepare our kids for a lifetime. what do we need to do differently? >> you know, one of the most exciting things about this is that the smartest countries in the world were not always so smart. so change is possible. sometimes feels like it's impossible but one thing that all of these countries did was they made school harder.
it sounds really simple but in every conceivable way they made it much harder to become a teacher, the material is more challenging and the testing and the homework and everything was just of a more rigorous, higher quality so it was quality over quantity. >> and the information you got from the embedded students is amazing. another one you shadowed, eric went from an affluent minneapolis suburb to south korea, that country spends $14 billion a year on afterschool tutoring and raids conducted to make sure that students pay attention to the curfew. >> really, really admire the way koreans teach math. it's so much more integrated. they were learning advanced concepts of calculus and geometry and trigonometry. >> interestingly, the stress got to eric and transferred out. how do you strike the balance between the hamster wheel and the moon bounce schools?
>> right. right now, the united states is definitely in the moon bounce category in most places so when we think that the kids are under pressure and high stakes test, that is not anything close to what much of asia is dealing with. that is the pressure cooker which is the other extreme. a much healthier model is a place like finland where when the kids are in school, they're doing high quality, challenging work and incredibly well educated teacher who is getting in to teacher training college in finland is the same as mit in the united states. you have a quality again over quantity. >> some teachers in finland who want to be teachers and bright don't make the cut. something like 10% of people that want to be teachers can be. it's a very respected profession. is that part of it, too, that you have got really dynamic teachers and not everyone can do it? >> right. and this is something that i knew would be important but i was surprised at the ways that it affects kids themselves so obviously when you have very highly educated people becoming
teachers that is great because they know the subject and a fluency for teaching but the you send a signal to kids about how serious you are about education when you make it that co competitive to be a teacher to begin with. >> 18% of elementary school teacher preparation programs taught all of the widely accepted practices. are we failing to teach our teachers properly? >> this is a long-standing challenge in this country and many countries around the world. we say that education is important but we're not very rigorous in the way we train teachers in most places. most education colleges admit almost anyone interested in studying education and we, you know, we end up educating twice as many teachers as we need as a result. >> why don't we care more about it? we talk about it. we argue about it. there are a lot of opinions about education, education reform. but you say something in the book that's so interesting. wealth -- we don't need rigor in this country. we have wealth. we have always been a rich
country and that's starting to change. and the patterns of wealth is changing and makes education that much more important. >> i think that's right. historically, we haven't needed to produce millions of students who can think critically in math, reading and science. we didn't need to do that. but now we are getting a place where those skills are becoming more valuable than gold and we really do know now that the international test scores you cited, there's nearly a 1 to 1 match for long term gdp growth and increases in those scores. >> really interesting book. the smartest kids in the book, so nice to meet you. i think it's really well done and so glad you tackled and i love the kids who were your super spies in there to help you navigate through it. thank you so much. >> thank you. big spenders actually might be a big turnoff. that's next. and we've made a big commitment to america.
yahoo! is back on the map. according to comp score, yahoo! sites were the most visited in the country in july and first time they have beaten google in more than two years. for more stories that matter to your money, give me 60 seconds on the clock. it's money time. ♪ it's back to school but not for everyone. government spending cuts known as the sequester hit head start programs. eliminating 57,000 spots for
preschoolers starting in the coming weeks. you might think flashy cars and clothes are the key to love but it turns out saving is sexy. a new study finds people are more attracted to savers than big spenders whose behavior may seem wasteful. if you're a wealthy genius there's a good chance you use google. rumor has it apple will ship two new iphones in september. a high end version and the budget iphone. the lower cost option could boost the presence in china, the fastest growing market for smartphones. tesla model s earned the highest possible rating in the government crash ratings and not only a perfect score but the highest score ever. kodak is finally ready to reinvent itself. a judge approved the company's plan to exit bankruptcy but don't expect to see the iconic rolls of film on shelf. it will